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Illustration: Lazaro Gamio/Axios

Comcast and Disney are about to engage in a bidding war for the entertainment assets of 21st Century Fox, and analysts tell Axios that Comcast is likely to win because it's more desperate for what Fox is trying to offload.

Why it matters: There is huge pressure on media and telecom companies to compete with new rivals like Amazon and Netflix, so the loser will be forced to buy something else.

  • Background: Disney originally agreed to buy Fox's entertainment assets for around $52.4 billion, but was then topped by Comcast's $65 billion, all-cash offer. Disney is expected to come back over the top this week, and Comcast has given no indication that $65 billion was its best and final offer.

For Comcast, this is all about large-scale international diversification, which relatively difficult to find elsewhere. Rich Greenfield, a managing director and media analyst at BTIG, explains:

"They've done well being vertically integrated in the U.S. but they realize that business is slowing. You want to add a little to your business in the U.S. but what you really want is to replicate that success globally. No other assets let you go global like Fox's stake in Sky Broadcasting, Star in India and Fox's Latin America assets. It's very hard to see another obvious fallback plan if you're Comcast.... you can see why [it] feels it must ultimately win."

Disney, on the other hand, views Fox's Sky, Star and Hulu assets as critical to its direct-to-consumer subscription video ambitions as it attempts to catch Netflix. However, it may have other less costly options like Spotify and/or Twitter (whose current combined market cap is almost exactly what Comcast is offering for Fox). Per Greenfield:

  • Spotify has globally scaled its direct-to-consumer subscription business.
  • Twitter has a global, mobile-first audience that's been investing in video technology and content rights for the past two years.

Other Disney backup plans could include Pandora or Snapchat, even though Pandora doesn't have an international business and Snapchat doesn't have a paid subscription business.

Disney also is already facing some analyst opposition to prevailing in a bidding war with Comcast, with ad and media research firm Pivotal downgrading its stock on Monday from "hold" to "sell." Pivotal also worried about what happens to Disney without the Fox assets but, again, it has other ways to at least partially meet its needs.

Be smart: With the biggest regulatory hurdles cleared due to a successful AT&T takeover of Time Warner last week, the winner will probably come down to business decisions, not likelihood of approval.

Bottom line: Bet on the more desperate buyer.

Go deeper

Tech scrambles to derail inauguration threats

Illustration: Sarah Grillo/Axios

Tech companies are sharing more information with law enforcement in a frantic effort to prevent violence around the inauguration, after the government was caught flat-footed by the Capitol siege.

Between the lines: Tech knows it will be held accountable for any further violence that turns out to have been planned online if it doesn't act to stop it.

Dave Lawler, author of World
2 hours ago - World

Uganda's election: Museveni declared winner, Wine claims fraud

Wine rejected the official results of the election. Photo: Sumy Sadruni/AFP via Getty

Yoweri Museveni was declared the winner of a sixth presidential term on Saturday, with official results giving him 59% to 35% for Bobi Wine, the singer-turned-opposition leader.

Why it matters: This announcement was predictable, as the election was neither free nor fair and Museveni had no intention of surrendering power after 35 years. But Wine — who posed a strong challenged to Museveni, particularly in urban areas, and was beaten and arrested during the campaign — has said he will present evidence of fraud. The big question is whether he will mobilize mass resistance in the streets.

Off the Rails

Episode 1: A premeditated lie lit the fire

Photo illustration: Sarah Grillo/Axios. Photo: Chip Somodevilla/Getty Images

Beginning on election night 2020 and continuing through his final days in office, Donald Trump unraveled and dragged America with him, to the point that his followers sacked the U.S. Capitol with two weeks left in his term. Axios takes you inside the collapse of a president with a special series.

Episode 1: Trump’s refusal to believe the election results was premeditated. He had heard about the “red mirage” — the likelihood that early vote counts would tip more Republican than the final tallies — and he decided to exploit it.

"Jared, you call the Murdochs! Jason, you call Sammon and Hemmer!”